Understanding Petrol Price Increase by Caretaker Government is important before we blame anyone. The fact remains that the petrol price was increased in the international market. Moreover, there was a major blow to Pakistani rupee from the dollar. It had forced the government to increase the rates for the Pakistani consumers.
Now, let us see the facts. If we compare onwards of 1st July 2022, we can note that there were high costs at the refinery stage. Although, there wasn’t any sales tax and other levies such as PDC or PDL were also at the lowest. Yet, there were serious challenges with regards to petroleum costs for the market stakeholders. The government had to bend down to adjust the cost support for the petroleum industry. Thereby, several other costs were included.
The government had increased PDC, PDL and other costs from 1st August 2022. These costs have stayed uniform in the whole period. Thus, the price didn’t fluctuate to adjust taxes or any other cost for the general public.
However, the government is dependent on the fuel imports. Thus, the cost is very much reflective of what the government gets from international market. Let us also add here that there were hopes of using the Russian Oil in Pakistan. Yet, the recent issues of inability to process the oil in Pakistani refineries has dashed all such hopes. The government is solely dependent on the Middle Eastern or the Western fuels for consumption in Pakistan.
Understanding Petrol Price Increase
So, let us review what actually took place:
The price for petrol at the refinery stage was 211.76 on 1st August 2023. The same price was 233.19 on 15th August 2023. This increase of 21.43 was reflected in the OGRA’s presentation to the Government of Pakistan. Thus, there were no options with the caretaker government due to the mines imbedded in the system.
Unfortunately, the price of dollar is continuously increasing and it will also have an impact on petroleum products in Pakistan. We can expect a further increase of petrol prices with a logical stop at 350 Pakistani Rupees per liter in the upcoming months.
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